Tax obligations for dual citizen (Belgium vs USA) - Which country should I pay taxes to?

The US-Belgium tax treaty doesn't eliminate your US filing requirements as a US citizen, but it does prevent double taxation. Here's what you need to know: As a US citizen, you must file US tax returns annually regardless of where you live - this is due to citizenship-based taxation that's almost unique to the US. However, you can use either the Foreign Earned Income Exclusion (FEIE) or Foreign Tax Credit (FTC) to reduce or eliminate US tax liability on income already taxed by Belgium. Since you're living in Belgium, you'll also need to file Belgian tax returns as a resident. Belgium taxes worldwide income of its residents. For your specific situation with a US client, you'll report this income on both tax returns. On your US return, you'd likely benefit from using the Foreign Tax Credit since Belgian tax rates are generally higher than US rates. This way, you effectively only pay the higher of the two tax amounts.

I was stuck in a similar situation last year with dual US-UK citizenship. What really helped me was using taxr.ai (https://taxr.ai) to figure out my treaty benefits. I uploaded my income docs from both countries, and it analyzed which treaty provisions applied to my situation. The tool actually showed me that I was eligible for certain treaty benefits I didn't know about - saved me from overpaying in both countries. It was particularly helpful with determining which deductions I could take in each country and how to properly report my foreign business income without getting double taxed.

I have to admit I was wrong about taxr.ai - it actually saved me from a huge headache with my Belgian-US tax situation. After trying it, the system identified an obscure provision in the tax treaty that applied to my consulting work. My Belgian accountant hadn't even caught this! It walked me through exactly how to report my income on both returns and showed me which forms to submit to avoid double taxation. The tool also generated a letter explaining my treaty position that I could include with my returns. Most importantly, it helped me understand which country had primary taxing rights for different types of income - this wasn't as straightforward as I thought because of the nature of my work.

For anyone dealing with the IRS internationally, I cannot recommend Claimyr (https://claimyr.com) enough. I spent WEEKS trying to reach someone at the IRS about my foreign tax credit questions. Their international line was always busy or would disconnect me after waiting for hours. I tried Claimyr as a last resort, and they actually got me connected to an IRS representative in under 20 minutes! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The IRS agent was able to confirm exactly how I should handle my specific situation with Belgian income. Instead of guessing or potentially filing incorrectly, I got clear answers directly from the IRS about my dual-citizenship reporting requirements.

I need to eat my words about Claimyr. After my skeptical comment, I tried it in desperation last week when I needed clarification on FBAR requirements related to my Belgian accounts. Got connected to an actual IRS international tax specialist in about 15 minutes. The agent walked me through exactly how to report my foreign accounts and confirmed how the treaty applied to my situation. They even emailed me specific resources for dual citizens. I've lived abroad for 12 years and this was literally the first time I've ever been able to get clear guidance directly from the IRS. Worth every penny just for the peace of mind that I'm filing correctly.

One practical tip from my experience (Belgian-US dual citizen here too): make sure you're properly documenting the "tax home" concept. Since you're a freelancer with a US client but living in Belgium, keep thorough records proving your Belgian residency. This includes rental agreements, utility bills, Belgian bank statements, etc. The IRS sometimes questions whether someone truly has their tax home abroad, especially when your income is coming from US sources. Having strong documentation has saved me from additional scrutiny.

Has anyone had issues with Belgian banks because of your US citizenship? My bank in Brussels keeps sending me FATCA forms and warning me about reporting requirements. I'm worried they might close my accounts if I make a mistake on these forms.

As someone who went through this exact same situation a few years ago, I can share what worked for me. You're right that the US-Belgium tax treaty prevents double taxation, but as a US citizen, you'll still need to file with both countries. Here's my practical approach: First, establish your Belgian tax residency clearly (sounds like you already have this). Then file your Belgian taxes first since their deadline comes earlier. Belgium will tax your worldwide income, including your US client payments. For the US side, you'll file using Form 1040 and claim Foreign Tax Credits (Form 1116) for the taxes you paid to Belgium. Since Belgian tax rates are typically higher than US rates, you'll likely owe little to nothing to the IRS after applying these credits. Don't forget about FBAR reporting if your Belgian bank accounts exceed $10,000 at any point during the year - this is separate from your tax return but crucial for compliance. One thing that caught me off guard: make sure you're classifying your freelance work correctly on both returns. Belgium might view it differently than the US, so keep detailed records of your work arrangements and payment structures. For affordable professional help, look into expat tax specialists who offer flat-rate consultations. Many charge $200-400 for an initial review, which can save you thousands in mistakes or overpayment.